Desi Back to Desh

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Risk Applications and Frameworks: Preface to the first edition

Ever since I started running risk management training workshops and teaching Executive MBA students, I had been looking for a textbook that walked the middle ground between plain English and as few mathematical equations as possible. It had to be concise and to the point yet cover the basics of quantifying risk, implementing risk policies, derivative pricing, product types and real life market applications. Easy to read but deep enough to be a handy desk reference, perhaps a cross between a HBS case and a customized text book.

Towards the end of 2008 we started work on a project that resulted in the product you now hold in your hands. Let me be honest and upfront, we had to let in a few formulae (Paul Petty will never forgive me) since the simplest pricing model also required elementary mathematics. But we compensated this failing by including as many rich cases as we could find that would help students understand and appreciate the world risk managers and derivative traders live in.

This is a book inspired by questions, not answers. I hope that it helps you ask the right questions and interests you enough for you to make the effort to find the right answers.

Many clients, colleagues, peers and family members contributed and sacrificed to make this project real. While their contribution added value, any mistakes and oversights are completely our responsibilities.


(Jawwad Farid is an MITEF business acceleration plan (MIT BAP) runner up, an Asia Pacific ICT Award finalist and a PASHA ICT Award Winner for the best financial application. He has also served as a judge at the Asia Pacific ICT Awards in Macau, Singapore and Jakarta as well as a PASHA ICT Award Judge in 2006, 2007, 2008 and 2009. The founder of Alchemy Technologies, the author of Reboot, Understanding Commodity Risk and Risk Applications and Frameworks, an actuary by profession and an MBA from Columbia Business School, Jawwad is a regular contributor at Starup Insights, Crude Oil Insights and the Desi back to Desh blog)